The recommendations of the ‘Committee to ReviewImplementation of Informal Sector Pension’, (the Bajpai committee on NPS reforms) have been put up on the PFRDA website, inviting public comments and stakeholder’s views before it is finalised.
The committee’s goal is to recommended ways of reviving the public version of the NPS, in which anyone can invest. The NPS is widely perceived to have failed to take off, mainly because those charged with selling it are not interested in a product that earns them practically nothing.
The major recommendation of the committee is that the NPS distributors (or POPs—points of presence in NPS terminology) be paid a commission. Here are the major recommendations:
1.POPs will be paid 0.5 per cent of the amount invested, subject to a minimum of Rs 20 and a maximum of Rs 50,000.
2.Newer type of investment plans should be offered, including inflation-linked and capital-protection ones.
3.The postal department should be involved actively in NPS distribution.
4.Pension fund managers should be allowed to have subsidiaries which will distribute the NPS.
5.The PFRDA should be better-funded, initially by the government and eventually by charging the pension fund managers 0.01 per cent of assets per annum. As the report puts it, ‘This committee firmly believes that PFRDA should be financially autonomous to help itdischarge its duties as an independent regulator and to nurture a pension sector that is freefrom controversy or regulatory capture.’